where orders emerge

N.F.L.

I confess to following only one sport passionately: American football (both college and the N.F.L.). I confess further to being what I have been since 1967: a black-and-gold bleeding fan of the New Orleans Saints. (The first thing I read in the morning ain’t the opinion sections of the Wall Street Journal, New York Times, or Boston Globe; it’s not any economics tome or history volume; it is – always, daily – the Saints section of the New Orleans Times-Picayune. No joke. I get around to reading that less-important stuff only later.)

So as the N.F.L. labor lockout (apparently) draws to a close, the following question occurs to me:

Suppose that today a group of people form today the National Frisbee League (N.F.L.). They develop rules for a team sport played by really good Frisbee players. From the outset – July 18, 2011 – these National Frisbee League pioneering entrepreneurs list as among their league’s rules a prohibition on any team in the National Frisbee League to pay any player more than $100,000 annually – certainly a decent salary in modern America, but not remotely close to a princely sum.

Suppose the National Frisbee League becomes wildly popular – say, similar in popularity to the National Football League. Further suppose (hardly far-fetchedly) that, without the strict $100,000 per-player cap, many teams would compete for Frisbee talent by offering millions of dollars a year.

But no such competition is permitted by league rules. It has never been permitted.

Questions: Would the sport suffer much? Would this strict per-player annual-salary cap be economically unjustified (that is, should the National Frisbee League abandon – to promote its owners’ own best interests – the salary cap after the owners realize just how wildly popular the National Frisbee League has become)?

The above two questions are not rhetorical.

UPDATE: What if the per-player annual salary cap were instead $1M – a lot of money even by modern American standards, but not a lot by the standards of the National Football League circa 2011?

Comments

if they don’t lift the cap, a new league will form that pays players more in line with their value.

TimJuly 19, 2011 at 7:39 am

Doubt it. The NFL has a monopoly on professional football. Can pay whatever they want and only marginally affect health of the league…..especially because Don critically left out the issues of outside sponsorship deals.

JimJuly 19, 2011 at 11:10 am

I disagree Tim. With a $100,000 NFL salary cap, the alternative league would steal their best players and overcome the branding strength and inertia of the NFL. As the salary cap rose, this strategy would have less chance of working.

@Jim: still not quite correct. To garner the value of the current NFL one needs more than just players. Consider the value of an alternative league forced to play only in high school stadiums. In short, to reap the full value of the NFL one needs players, coaches, stadiums and TV coverage. There’s probably more but you get the gist of it.

JimJuly 19, 2011 at 2:41 pm

I agree Redst8r. But as history shows, TV coverage and stadiums and the like are all subject to market forces to a large extent. Stadiums can be rented, and TV coverage will go wherever the audience is. I speculate that a $100,000 cap would effectively allow competition to enter and steal virtually all of the best players, and coaches would shortly follow.

Fan (customer) loyalty is huge in almost any brand. Witness Verizon stickiness despite their much higher prices (although they arguably have higher quality as well, some of which is guarded by regulation). But the essential argument remains; does such a low cap allow a total rout of the existing brand? I suggest that given the amount of capital in the world, the likelihood is high.

David RotorJuly 19, 2011 at 12:23 am

In addition to Jeff’s comment (new league) I’d suggest:

1. It seems unlikely that a professional sport would become wildly popular with a salary cap. Salaries of professional athlete’s in a sport seem to add to the perception of popularity, particularly salaries for the star players.

2. In competition for the best athletes a salary cap of $100,000 would limit the owner’s ability to attract talent to their sport. That again, suggests a difficulty in the setup that this new NFL would have already become wildly popular. The public is not likely to want to see better than average athletes, when the competing sports offer “best in the world” athletes.

JoshJuly 19, 2011 at 8:55 am

The NHL has team salary caps. The other leagues look like they are going to move that way. League parity is good for everyone, No one likes New York to have tripple the payroll of Kansas or whoever.

JimJuly 19, 2011 at 11:19 am

To the extent that great frisbee players had no alternative, the sport would thrive on $100,000 salaries. Some great frisbee players would play other sports that paid them more, just as they would enter other professions if their pay was higher.

Therefore the relationship between salary cap and alternative careers, including frisbee leagues, would define the success of the NFL, assuming a high demand to watch frisbee.

Troll FinderJuly 19, 2011 at 12:31 am

Go Chiefs! Kansas City woooooohoooooo!

That is all.

mitt romney haterJuly 19, 2011 at 12:46 am

The U.S.F.L. was seen as a threat to the NFL in the ’80′s… remember when Donald Trump signed Lawrence Taylor away from the Giants? No doubt that, while the USFL never actually threatened the NFL’s popularity, it did push the NFL toward better compensation for its players.

Ditto with cheap airlines; they may not put the biggies out of business (although recently they have) but they sure lower their prices

Don Boudreaux is a weight lifter and a football fan. I never would have guessed.

I wonder what next week’s posts will tell us about him.

mitt romney haterJuly 19, 2011 at 10:14 pm

You think economists can’t be football fans? They’re just nerds who talk about nuthin other than econ all day, right? Don is a huge Saints fan

MichaelJuly 19, 2011 at 1:27 am

Yes.

Teams will still compete for players, just along different margins. So, when JeBron Lames, formally of Cleveland, reached free agency, he signed with Miami with his buddies Wayne Dade and Bhris Cosh, because the pay is the same, but in Miami hot girls in bikinis flock to him on the beach. A pretty cool gig if you can get it. Now, JeBron Lames was worth much more to Cleveland than to any other team. If Cleveland could have, they would have offered him a much bigger contract than any other team was offering. While Cleveland doesn’t have girls in bikinis, JeBron may have been willing to stay for a bigger pile of money. Unfortunately, it is against the rules for Cleveland to compete on the one margin they could have been competitive in – money. And so we see King Lames taking his frisbee talents to South Beach.

The salary cap makes it much more difficult for players to find the teams that value them the highest – and for teams to sign the players they value the most.

DanoJuly 19, 2011 at 10:28 am

I’d like to add that since the cap is on the salary before tax, teams in states with no income tax have a slightly higher cap. So Cleveland was also hindered because he could make more in Miami.

KevinJuly 19, 2011 at 1:33 am

I have no idea. Competition within a free market exists in order answer these kinds of questions.

JoshJuly 19, 2011 at 8:59 am

Pro sports is more like a monopoly, or a least an oligarchy, with a handful of billionare owners making the rules. No libertarians seem to complain about that or side with the players much, only cry about paying their own taxes lol.

KevinJuly 19, 2011 at 11:12 am

Well, we have different definitions for monopoly. Even though the NFL and MLB are the only real leagues for each of their respective sports, to me a large market share does not constitute a monopoly.

Firstly, they must compete across sports, and so if a league has bad practices, people might end up finding other sports more entertaining. Secondly, and most importantly, new leagues can and are formed (see the failure called the XFL). Even if a company has a large market share (perhaps naturally efficient), the threat of competition entering the market can be strong enough to keep it in check.

All capital and all human capital is mobile. Most capital and most human capital, over time, migrate to the environment of lowest taxation and lowest regulation.

One strategy deployed might well be to situate your pro Frisbee team in a nice low tax/low regulation state. A nice state with no state income tax. As salaries increase, you can pay slightly less (as the owner) than the owner of a team in a high tax state…. yet still attract the same player on a “after tax basis”. You win as the owner by paying slightly less and the player wins as the slightly lower salary [say 2%] is made up with the lack of state income tax [e.g. 4 to 10%].

JoshJuly 19, 2011 at 9:00 am

Human capital is not mobile. Just ask the people trying to legally immigrate to the US.

Slappy McFeeJuly 19, 2011 at 9:16 am

Human capital is mobile – just look at all the people who emigrate illegally to the US.

DamianJuly 19, 2011 at 2:18 am

Miami actually can offer Lebron more money – they have no state income tax.

To continually attract the best talent and entice youth to enter the sport, more money can help, especially because good ultimate frisbee players are great athletes and this league would compete with other athletic leagues and jobs.

“would the sport suffer much?” That is hard to answer because the health of the sport is a vague concept. I hate certain aspects of sports (sacrificing purity for TV ratings), but the NFL, NBA and MLB all do it, and only the NFL has a strong cap. The cap has tradeoffs – perhaps more parity in the league, perhaps less player movement, but also disgruntled players and work stoppages.

GaryJuly 19, 2011 at 5:59 pm

“Miami actually can offer Lebron more money – they have no state income tax.”

Yeah but they have really high property taxes, and something tells me LeBron isn’t living in a 1200 square foot condo.

He also won’t reduce his state income taxes to zero, only his home state taxes. Most states tax non-residents on wages earned in their state (to the extent that they are not covered by border state rules or other exemptions). He’ll still be paying 11% to CA for his games against the Lakers, 8% to NY for his games against the Knicks (of course, pro-rated for the number of duty days spent in those states).

If you think it through a few steps, you’ll find it is fairly interesting, and unnecessarily complicated, just like any other tax calculation in this country.

JayJuly 19, 2011 at 2:23 am

They tried that already. Haven’t you seen the movie Baseketball? That is where I learned the ‘fact’ that Shaq made all his money playing college basketball!

In Major League Soccer there are two reasons transfer-income caps are placed on teams,

1. Many teams in the previous league suffered bankruptcy from spending too much money on new players and failing to make it up in revenues. Teams overestimated the profitability of their enterprise. Thus, MLS has put in place certain restrictions to avoid similar problems.

2. There are some teams with more money than others. These teams will obviously be able to out compete less wealthy teams for better players. Just look at European football leagues. In Spain, top-transfers are basically monopolized by Real Madrid and Barcelona. In England, Manchester City could only find its way into the top four teams by being lucky enough to be bought out by a very wealthy owner. These leagues suffer from a lack of competition.

Major League Soccer is a good real world example for this post. When it was started, it was setup as a single entity. While each team has an investor/operator, player contracts are with the league and the league pays their wages.

In the early years, this helped contain costs by preventing teams from bidding up salaries for domestic players. Team’s couldn’t pay more than something like 300k to a single player, and there was a team salary cap. Minimum salaries for rookies were very low (20k-30k). Many players could go overseas, mainly to Europe, for a better payday.

Now, each team can carry up to 3 Designated Players. For these players, only a portion of their salary counts against the cap, and the rest is made up by the team’s investor. This has helped bring recognizable stars like David Beckham and Thierry Henry to the league and keep American stars like Landon Donovan stateside.

MLS also benefits in that FIFA, the sport’s governing body, will only recognize/sanction one league as the “First Division” in a country. This prevents other leagues from competing within a country. Any players/coaches working in an unsanctioned league would not be eligible to play in FIFA sanctioned competitions like the World Cup.

richardJuly 19, 2011 at 3:56 am

Don,

There is no need to guess. We currently have these caps on two countries in the world: Cuba and North Korea.

An enterprising individual might be able to exploit the situation by forming a league with no such salary cap.

J! E! T! S! Jets! Jets! Jets!

JoshJuly 19, 2011 at 9:01 am

An enterprizing group of people, all with more money than Mark Cuban, you mean.

VanJuly 19, 2011 at 9:22 pm

If you have a better product, the ability to execute and a moron incumbent competitor what more could you ask for? …As long as the government stays out of equation – (except that’s generally how morons become incumbent competitors)

You don’t need money, just a better mouse trap.

vidyohsJuly 19, 2011 at 6:16 am

If entertainment falls under the definition of free enterprise, then people should be free to form a sport league under any rules (full-contact Frisbee) they choose.

Players should be able to play for what ever salary they can attract, or not play at all, however they chose with no outside interference.

The concepts of should, must, can, and will, are the prerogatives of those involved in the business no matter how successful or how unsuccessful, and no outsider (government) should attempt to insert itself into private enterprise.

Of course, in America, that means your sport is doomed, because it would instantly be smothered with Congress being “compelled to address the Frisbee problem”.

The only real form of competition in sports is for the entertainment dollar. The NFL objective is for teams to win all of their home games while maximizing income from ticket sales, television contracts and sweetheart stadium deals financed through the public purse. The NFL draft eliminates the freedom of a player to pick his employer. Parity scheduling insures that the worst teams play other sub-standard crews, hopefully mollifying tempermental fans. Thus NFL games are competitive in only a theatrical sense, since success is penalized.

AlanJuly 19, 2011 at 2:09 pm

Tom, you hit the…
My Saint-eating Panthers biggest competition don’t come from within the NFC South division; it comes from all the entertainment events Carolina consumers can spend their money. Note, a salary cap is useless without a salary floor – which keeps ‘small market’ teams within a set range.

The NFL is a HR dept. to a company with offices all over the country. There are some cost of living adjustments, but the going rate for long-snapping jobs is about the same across the company.

I hope the new CBA shares revenue by paying divisional and Super Bowl winners exorbitant sums of money. Currently Super Bowl champs receive under $100K per player. It would be nice to see a payout enough to double GM and players salaries.

Ryan VannJuly 19, 2011 at 10:22 pm

You outlined some of the reasons I call American Football Commie Ball.

BTW, I am as geeked up as you are Dr. on the football season starting. I have found an entire colony of Louisiana people here in north Houston, we get together and have cook outs and watch the Saints and LSU.

I often thought that if there was such a thing as a hibernation chamber I would just hibernate in the boring months between Feb and August.

Matt BramantiJuly 19, 2011 at 11:38 pm

It’s a big colony. I recently overheard a colleague say “Kingwood is Lafayette West.” So true.

But I can’t say much about the NFL. I swore ‘em off when my beloved Oilers skipped town and stuck us Harris County taxpayers with the bill. I’ll stick with college ball – Go Irish!

Heh, I lived in Lafayette for years and so did all of my five closest friends and we all live in the cypress area. I love college ball more than the pros but I have recently been interested in the Texans because I guess I just like underdogs. I went to a game last year with some free tickets, it was fun.

Daniel PlastersJuly 19, 2011 at 7:53 am

Short run, new league. If league is shot down or has no effect on wages, see long run.

Long run, talent evaporates. Why play frisbee and get paid little when as a top athlete I can earn more in other sports. Like, say, Frisbee Golf.

DRDRJuly 19, 2011 at 7:59 am

We already have a football league with a really low salary cap — it’s called NCAA college football, and we have yet to see a successful competitor as Jeff suggests would happen. One reason for the monopsony is that these leagues and teams build up a considerable amount of history & brand equity with all the money spent on promotion over the years. This is the schools’ source of bargaining power. Another factor is arbitary tax treatment — would an NCAA competitor be able to attach itself to a nonprofit and get tax-exempt status like college athletic programs?

apples and oranges comparison. College players continue to play for the reason that they want a career in the NFL, and the NFL enforces the college system by not having their own minor league as does Baseball, and by requiring a minimum age.

BrianJuly 19, 2011 at 8:35 am

A price ceiling is a price ceiling. It doesn’t matter if it’s a price ceiling on commodity prices or labor prices, the result is the same.

JMBJuly 19, 2011 at 9:32 am

Nothing more needs to be said.

Trapper_JohnJuly 19, 2011 at 10:31 am

THIS ^^^

Robert KwasnyJuly 19, 2011 at 8:56 am

Salary cap is a good thing for the owners, because it ensures that the league will be more competitive, and thus will attract more attention from fans and media. If it does not exist, there will be few extremely rich and extremely good teams and a bunch of franchises. It already exists in football (the real, European football; I refuse to call it soccer). Each national league has 3-4 teams fighting for the championship and 16-17 fighting for the rest of the spots. The thing is that in Europe fifth or sixth place are not so bad – you qualify to the less prestigeous European cup. But in US sports victory is all that matters. Without salary cap, you would have teams like Celtics, Lakers, Heat and Mavs fighting for the championship and 26 other fighting among themselves for the scraps. The less competitive a sport is, the more boring and predictible it becomes. Celtics and Mavs need Wolves, Clippers, Grizzlies and Bucks to remain competitve. Otherwise many people (and thus sponsors and media) would stop caring.

We can argue how large the salary cap should be – $100,000 is clearly not enough, neither is $1,000,000. That is because the competition for players does not happen only between teams from each sportsleague; the competition exists between sports. If a young athlete sees that maximum salary in NFL is $1,000,000, he will be more likely to practice ice hockey, basketball or baseball. NFL competes with NBA just as much as Celtics compete with the Lakers. That is why many other sports do not have as high average level of players’ abilities – the most talented athletes never choose to practice frisbee and volleyball in the first place.

Dan HJuly 19, 2011 at 9:43 am

Don,

I think this discussion could be better served by using college football as an example.

- The players are not allowed to profit at all.
- The players are not allowed to transfer teams (schools) without being penalized.
- There is no substitute league to play in. There is no football “minor league”, and per the league rules in the NFL and CFL, the players must be 21 by the end of the year to play.

I’m a graduate of Ohio State, for the record. I hope change comes soon to college football. The players need to at least be given a stipend, or be allowed to sell their own damn property.

KirbyJuly 19, 2011 at 10:22 am

Well skill would follow the money- capped at whatever skill makes them worth $100,000 or $1m a year

Slappy McFeeJuly 19, 2011 at 10:45 am

No sports post should go by without mentioning Russ’ podcast regarding Moneyball and The Blind Side

I may be wrong, but my guess is that having the cap would enable more teams to pop-up (greater profit margins), helping grow the sport in the early stages. In the later stages, the cap may hurt the sport because top athletes may decide to go to another sport, where the salary is possibly better.

If there actually were a popular National Frisbee League, I know for sure that I wouldn’t be a poor graduate student in liberal arts right now…

DavidJuly 19, 2011 at 10:57 am

Or, what if it was $0, in which case you are talking about college football.

DarrelJuly 19, 2011 at 11:20 am

Artificial caps on single players will only reduce the level of skill overall. Whole team salary caps are an effective VARIABLE in keeping competition between seperate teams somewhat stable. However – if we are going to discuss the flaws in American Football – we should be discussing the vital artificial shortages that we have created.

1. Roster spots. There are 53 spots per team. This is stupid – why not let there be 100 roster spots on each NFL team? If you analyze all the high-level football being played OUTSIDE of the NFL – you’d see that the talent pool for Professional Football players is miles deep [See: NCAA Football, USFL, NFL Europe, Candian Football League, etc. etc.] Many of these players are right on the cusp of being good enough for the NFL, their only problem is that there are too many OTHER players currently playing above their skill level. But Players’ skill levels rise and fall dramatically throughout their careers. Many players fight hard the first couple years before actually breaking out into stardom. If more players were given the opportunity to develop beyond college, the overall talent level in professional football would actually GROW naturally through increased competition.

2. Shortages on actual teams. To put a team together – you need lots of things. Money men to take the risk, capital (for equipment, uniforms, etc.), skilled players, venue/stadium to play in, a location with a high population of people that would support a professional team, etc. etc. Then you get into a whole new bag of worms when you start talking about broadcasting rights and promotional aspects. Then it gets even MORE complicated when politicians stick their hands into the pot.

The USFL had legs before Donald Trump torpedoed it out of his own greed to be part of the exclusive group of NFL owners. Spring football could work in America – there is more than enough demand to support MORE professional football teams and there is more than enough TALENT in America to fill those teams.

EugeneJuly 19, 2011 at 11:24 am

The players will still receive the amount of money that they are “worth” regardless of what the salary cap is. The teams in an attempt to hire the best players will bend/break the rules any way they can by including bonuses, free houses, pension, etc. So if the league is popular and generates a lot of profit then the players will get their “true worth” one way or another. Team owners in every single sport that has a salary cap have found a way to circumvent it.

ErichJuly 19, 2011 at 1:08 pm

Incentives. Incentives. Incentives. Of course the league would suffer – players would leave to play other sports, say baseball. Also, remember, most of exceptional athletes in most sports were great athletes in HS and college at other sports too. If the money isn’t there to play in the Frisbee league suddenly, and is still in baseball or basketball, players would, over the long term, likely shift away from Frisbee to a different sport. The talent pool for Frisbee would soon dry up and the league would suffer immensely, in the long term of course.

The variable that the professor left out is the Players’ Union. Without that, there would be no ‘labor disputes’ because players would be free to sell their talent without exposing the owners to ‘legacy’ costs – disability, long-term health care and other post-career benefits. That’s where all the debate is happening – the unquantifiable pay-outs that the ‘insurance’ policies the players want for their ‘protection’ – things that they would not ask for except as a group with the ability to take the system down by striking.

You may be sympathetic to the players’ need for such bargaining power – I’m not. They are free men who should be able to contract with the owners individually as they please.

Ryan VannJuly 19, 2011 at 10:28 pm

Isn’t the NFL itself invalid by your standards?

KendallJuly 19, 2011 at 6:33 pm

As Robert pointed out the key difference between sports leagues and most businesses is the Saints can’t make money without other teams. If Wal-Mart is so efficient it drives Target out of business it gains market share and both Wal-Mart and its customers benefit. If the Saints drive enough teams out of business they don’t have anyone to play and nobody benefits.

I have to disagree with Erich’s comment that a significant number of players could just shift sports. Just because an athlete is successful at different sports in HS doesn’t imply they could be successful in multiple professional sports. Almost none of the football players on my college team could have played on the basketball or baseball team. A few of them might have made the wrestling team. Michael Jordan didn’t do well in baseball and Danny Angie failed in baseball before having a good career in the NBA. Of course Bo Jackson and Deion Sanders are counter examples but from my experience they are in the minority.

Andrew HJuly 20, 2011 at 12:07 am

I’ve had a lot of discussions about salary caps in sports and one key factor caused me to change my opinion to being in favor of caps. While 100,000 dollars is kind of a low value, the edited value of 1 million dollars is a more workable value.

My main objection to not having a salary cap is that sports are meant to be entertaining. Having one rich team that wins every year (baseball?) is only fun for that team’s fans. Everyone else hates the fact that the only reason they lose is because they don’t have the cash. Since the NFL was not created to be a free market but rather an entertainment device, we must consider how decisions like this affect the entertainment value.

That being said, a few comments above have mentioned that perhaps a new league would be created. I don’t know about you folks, but I would never abandon my Packers. Maybe it’s different in other parts of the nation, but a league as rooted in tradition and history as the NFL is going to be really hard to dislodge – no matter how good the players in another league are. Again, this isn’t as easy buying a product from a store. A “substitute” league is, in reality, not a true substitute because it doesn’t contain the same teams and rivalries that have been thriving for years. Because of this, I don’t think the outcome can be predicted.

As for the cap, I think it keeps parity, as other have mentioned, which keeps things interesting for us viewers, which keeps us coming back for more.

In answer to your questions I can simply look to the Australian Natioanl Rugby League competition (NRL). There is a salary cap for each team ($2million per season for a 20 man squad), but there is an allowance for players to make some individual sponsorship income above that cap (but there are rules about when this can apply).

The reason for the cap is that historically there has been a huge wealth difference between Sydney clubs and regional clubs, leading to complete domination of the sport by a few clubs. This is not conducive to a league that wishes to expand the sport to other cities.

Now, the premiership is much more contestable by all clubs, and new teams can easily enter the competition and have a decent chance of winning, since they can buy the same amount of existing talent as everyone else.

Secondly, I think it creates a strong sense of pride and loyalty to clubs. When your club wins you know it’s because of your player’ and coach’s efforts to improve their performance, not because they found enough sponsorship to buy the best players in the league.

So from the point of view of the league, the cap appears to be a good thing, because it has fostered quite a deal of expansion in the past decade. The more fans, the more exposure of the comp, the more sponsorship revenue.

In fact, if you find the salary cap article on wikipedia it explores many of these ideas. My gut feeling is that salary caps must have decent benefits to remain so popular.

But, to the per player cap, I’m not exactly sure how much different this would be. I reckon that you would get far more club loyalty, since once the player is on the top income there would be no incentive to move away from home. Teams would be ‘home grown’. To me that would give a huge sense of pride to supporters.

You have to remember, that the motivation to play sport as a career is far less about the income that in many other fields. So I wouldn’t say that there would be a significant difference in the quality of the games.

Tom DJuly 24, 2011 at 1:39 am

Major League Soccer (MLS) is a great example of a sport that has a cap on the salaries paid by the clubs within the league, which you can compare to other soccer leagues around the world such as the English Premier League and the Spanish La Liga that do not have salary caps.

So, does MLS suffer compared to other leagues around the world that do not have salary caps? This summer MLS once again is hosting many premier league teams, such as Manchester United, Manchester City, Everton and the top La Liga teams Real Madrid and Barcelona. MLS is losing more of those games than they are winning. Talent wise MLS is outmatched by the foreign teams, especially in the second half of games where there are mass substitution of players on both sides. The MLS talent level general drops off substantially with second stringers in the second half, but the foreign clubs, on the other hand, are so deep in talent with huge payrolls that the second stringers are just as good as or sometime even better than the first stringers. There have been some really lopsided scores so far, but the first half of these games has been really competitive. Head to head the MLS suffers against foreign teams with unlimited payrolls.

But does the competition within the MLS league suffer versus foreign leagues? I don’t think so. Unlike say the English Premier League, the MLS acts as a single entity and it restricts any single team from dominating the league by overspending on players through a salary cap. This makes the MLS league more competitive. There are no dynasties in MLS. Sure DC United had a good run of winning early in the leagues history but this nothing compared to the English Premier League. Since the Premier Leagues creation, out of 20 teams, 4 teams have dominated the league and Manchester United has not been outside a top 3 finishers. La Liga is dominated by Barcelona and Real Madrid. As a fan, I prefer MLS’s system of a competitive balance. Knowing at the beginning of the season who will be the top finishers at the end of the season robs me of any drama regarding the outcome. This is the case with the aforementioned foreign leagues.

So, yes, MLS has less talent than English or Spanish teams, but I would not trade MLS’s competitive balance for the lopsided uncompetitive leagues that have been created oversees.